Samsung acquires local 'Internet of Things' startup SmartThings

The tech company sprang from a successful crowdsourcing campaign

Home-automation innovator SmartThings, one of the Twin Cities’ best-known tech startups, announced this week it is being acquired by Samsung in a reported $200 million deal, but will operate on its own and not be absorbed into the South Korean tech giant.

Offical terms of the Samsung deal were not disclosed.

SmartThings, which has split operations between Minneapolis, San Francisco and its Washington, D.C., headquarters, is among the best-known home-automation companies to seize on the much-ballyhooed “Internet of Things” movement. This is a high-tech trend to imbue household devices and objects with online capabilities via a range of Internet-aware sensors and other devices to make homes “smarter.”

SmartThings, which sprang from a hugely successful 2012 crowdsourcing campaign, faced a challenging future as an independent company. With tech giants like Apple and Google entering the home-automation space, SmartThings was in danger of getting drowned out. The Samsung buyout, rumored for weeks, looks to solve that problem.

Alex Hawkinson, SmartThings co-founder and chief executive, said the deal with Samsung is all about “scale.”

“This is an opportunity to reach a much bigger customer base more quickly than we otherwise would have,” Hawkinson said in a phone interview. “We’ll leverage their scale in lots of fun ways.”

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At the same time, SmartThings will retain its identity and independence as a part of Samsung’s Open Innovation Center, a loosely organized, autonomously operating federation of technology experimenters, he added. As part of this move, the startup is relocating to Palo Alto in California’s Silicon Valley.

“Our growing team will remain fully intact,” Hawkinson wrote in a blog post on Thursday. “In short: SmartThings will remain SmartThings.”

SmartThings, with 54 employees, is maintaining its Minneapolis presence, and even looking to increase it with a half-dozen job listings on its website. About two dozen workers currently operate out of the Twin Cities.

SmartThings, in addition to offering its own sensors for detecting movement, temperature and more, has worked to make its technology compatible with third-party makers of web cameras, motion detectors, Internet-aware door locks and lightbulbs, and other products.

SmartThings stitches such products together via its phone software and a hub-like device that connects to a home-broadband router. Users then use their SmartThings networks to automate their home lighting and climate control, detect water leaks and home intruders, and more.

Independence is critical in order to continue making such deals, Hawkinson noted. SmartThings wants to be a part of Apple’s HomeKit, a coming feature in Apple’s iOS that consolidates home-automation functions.

Even though Apple and Samsung have been bitter rivals, the nature of the deal between SmartThings and Samsung would allow an Apple partnership, Hawkinson said.

Hawkinson said SmartThings is now positioned to fully exploit what he calls the “third wave of the Web.” The first, he said, was Web publishing, and the second was social media.

The third, he noted, is the “the physical graph,” the “connection of everyday things. This is the biggest technology wave of the next ten years, and it will change literally every facet of how we live.”